Jamaica – Remittance and the economy after COVID-19

JamaicaThe COVID-19 crisis knocked the wind out of the economic sails of too many countries. Jamaica was among them. However, making a comeback is nothing new to this island nation. The country’s economy has weathered the financial crisis of the 90s and the global economic meltdown of 2008. Now Jamaica is ready to bounce back again.

Impact of COVID-19

Jamaica’s economy is expected to shrink by 5% as a result of the crisis. The country’s minister of Finance and Public Service Dr. Nigel Clarke stated as much. The Jamaican finance ministry is bracing for a double digit decline in government revenues. Much of this is on account of increased expenditure on health and support services.

Statistics given by the Bank of Jamaica (BOJ) indicate that tourism (20%) and remittances (15%) are two major contributors to the country’s GDP. Tourism saw a steep decline from 409,721 tourist arrivals in February 2020 to 177,318 in March. Jamaican borders were sealed during April and May. After reopening the borders in June the country hosted merely 35,216 international visitors for that month.

Remittances – The silver lining

Thankfully remittances showed a stark contrast to tourism. Jamaicans living overseas remit a significant amount of money every year. The BOJ’s monthly Remittances Bulletin said that there were net remittance inflows of JMD 24,334 million (USD 168.2 million) in February 2020. In March the figure was JMD 25,969 million (USD 179.5 million).

By July remittances to Jamaica had touched JMD 35,835 million (USD 274.7 million). During economic upheavals in previous decades Jamaicans working abroad were able to send money to Jamaica in larger amounts. This helped their families, as well as the country’s economy to overcome the crises. This time around seems no different. Incidentally Ria Money Transfer has launched a new promo which offers Bank to Cash transfers from the US to Jamaica at just $3 fee.

Braving the pandemic

At the start of the COVID-19 outbreak Jamaica responded swiftly by sealing its borders. This went a long way in preventing the infection from spiking. WHO Director General Tedros Adhanom Ghebreyesus publicly applauded Jamaica’s coronavirus preparedness and response. The US Ambassador to Jamaica Donald Tapia also congratulated the Jamaican government for their timely reporting of COVID-19 cases. He commended the Ministry of Health and Welfare for their proactive containment strategy.

While the Jamaican response certainly succeeded in containing the spread of COVID-19, the national economy took a hammering. On June 15 Jamaica reopened its borders to international tourists with a view to kick start the economy. There was an immediate spike in COVID-19 infections in the country. The administration had anticipated this, and was prepared. The necessary measures to contain the new wave of infections were already in place.

Counter strike

While reopening the country to tourists Jamaica employed a novel concept of ‘Resilient corridor’. This involved managing and tracking the movement of tourists along the country’s northern coast from Negril to Port Antonio. Tourists could enjoy all activities freely within the confines of the marked zone.

The corridor was gradually expanded to the southern coast, to include sections of Westmoreland, Manchester, and St. Elizabeth. The Jamaican government also released a contact tracing app called JamCOVID19. The app is available on iOS and Android, and is mandated for every international traveler who comes to the island. Jamaica’s Tourism Minister Edmund Bartlett expects 400,000 tourists to arrive in the country by the end of 2020.

Proofing the future

Jamaica’s foreign exchange reserves currently hover near JMD 500 billion (USD 3.5 billion). BOJ has expressed every intention to utilize this reserve as a cushion to soften the economic shock. The government has also launched the CARE Program to offer economic support to affected individuals and businesses. This scheme will entail generous grants along with temporary unemployment benefits. The program will offer affordable loans to business owners and the self employed whose earnings and revenues were affected.

Additionally, to the delight of many Jamaicans the government announced JMD 18 billion in tax stimuli. A small part of their compulsory annual savings will be returned to the people through a series of tax deductions. There will also be a dramatic reduction in regulatory fees on agricultural produce such as coconut, coffee, and spices. This is aimed to stimulate production and increase output, which would eventually bring the prices further down.

Jamaica’s holistic and forward-looking recovery strategy masterfully combines a range of hard and soft measures. It should be considered a role model for other economies in the region, and a case study for economists everywhere.


About the author: Hemant G is a contributing writer at Sparkwebs LLC, a Digital and Content Marketing Agency. When he’s not writing, he loves to travel, scuba dive, and watch documentaries.

Shift Frequency © 2020 – Jamaica – Remittance and
the economy after COVID-19

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